The software reseller market is undergoing a transformation — not gradually, but meaningfully. And one catalyst stands out: Microsoft’s decision to eliminate Enterprise Agreement (EA) partner rebates.

In years past, these rebates were the financial backbone of the reseller ecosystem. In 2023, Microsoft paid an estimated $2.5 billion in EA commissions to Licensing Solution Providers (LSPs). That figure dropped to $1.67 billion in 2024 and is expected to fall to just $583 million in 2025, after which it will be phased out entirely.

This is more than a shift in incentives — it marks a structural change in how the software channel operates.

A Market in Transition:The End of a Revenue Model

For more than a decade, resellers have relied on predictable rebate streams tied to licensing volume. That model is now being replaced. What we’re seeing isn’t simply the loss of margin — it’s a rethinking of commercial strategy for many players in the channel.

In response, many organisations are now placing greater emphasis on service-based offerings — particularly Software Asset Management (SAM), cloud governance, and AI-related advisory services.

SAM and AI: The New Area of Focus

As licensing revenue becomes less reliable, demand for high-value services is rising.

SAM has evolved from a compliance backstop into a strategic lever — helping organisations optimise spend, reduce risk, and govern complex hybrid environments. At the same time, AI is emerging as a new area of opportunity, from Copilot and Fabric guidance to responsible AI implementation.

Naturally, more providers are expanding into these service lines — some with established capability, others still building it. The result is a more crowded, more competitive landscape.

In this environment, clients need more than surface-level services. They need credible, experienced partners who’ve done the work — not just entered the space.

We Were Never License Resellers

At ITAA, this isn’t a pivot. It’s what we’ve always done.

We’ve never been a license reseller — and we’ve never been dependent on rebate structures. From day one, we’ve focused on advisory and consulting, building a business around independence, expertise, and long-term client value.

We didn’t enter this space in response to market pressures. We helped define it.

And we remain focused on what we do best:

• Delivering accurate, vendor- neutral advice
• Building audit-ready licensing positions
• Navigating complex contract and entitlement landscapes
• Driving strategic cost optimization across multi-vendor estates
• Providing defensible, data-led , informed decisions

Not the Newcomers — A Trusted Benchmark

As more players enter or scale up in the SAM and AI advisory space, clients are encountering a wider — and louder — set of options. Differentiation is increasingly difficult to assess.

At ITAA, we believe clarity comes from consistency.

We’re already where clients need us to be:

• Independent in our approach
• Informed by deep licensing expertise
• Ahead of vendor shifts
• Aligned to outcomes, not sales

Trust isn’t built by arrival. It’s built by delivery — over time.

A Louder — But Not Always Clearer — Market

We anticipate continued growth in the SAM and AI advisory market over the next 12–18 months. With that will come more messages, more offers, and more claims.

Our recommendation:

• Look for independence.
• Ask where the incentives sit.
• Prioritise experience over marketing spin.
• Choose partners whose business is built on insight, not upsell.

The Microsoft EA rebates phase-out may be a catalyst for change in the partner landscape — but not for us.

We’re not responding to this shift.

We were built for what comes next.

Steve Narey, Multi-Services Vendor Director

Steve brings over a decade of experience helping global companies optimize software license management, reduce risk, and cut costs, especially during cloud migrations. His expertise spans strategic relationship management, business development, project management, contract negotiation, cloud optimization, and program implementation.